Plug Power (NASDAQ:PLUG) stock has continued its impressive bullish run, posting an impressive 549% increase over the past year. The hydrogen cell developer has kept analysts busy, toppling their 12 month price target expectations. Plug Power’s sheer operating scale makes it the largest liquid hydrogen consumer in the world. The stock has been strongly influenced by Wallstreets bullish movement towards the next generation Hydrogen economy. The general consensus on Wallstreet suggests Plug Power has the potential to absorb this industry expansion. Moreover, an industry that could provide $2.5 trillion in direct revenues in 2050 according to the Bank of America. So let’s breakdown what analysts are saying about Plug stock and analyse the companies forecasts moving into the new age of zero carbon energy.
What are analysts saying about Plug stock?
The average 12 month price target for PLUG stock is currently $14.10, a realised downside of 14% according to WSJ data. To put the bullish sentiment shift into perspective, since our last article on PLUG in August the average price target from analysts has increased by 16%. We rarely see analysts update their 12 month price targets this consistently, suggesting Plug stock is outdoing the analysts.
However, smart money is starting to favour Plug power, which has delighted long term investors. Morgan Stanley upgraded Plug Power to an rating “overweight” rating. Simply put an overweight recommendation suggests the companies stock will likely outperform other companies in its sector. Morgan Stanley also upgraded their price target to $14, which the stock has since surpassed with steam.
Plug Power Pops on Morgan Stanley Upgrade – https://t.co/nwKVNVjkWh
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What are the forecasts moving into 2021 and beyond?
Firstly, revenue forecasts from analysts look steady moving into 2021. Revenue expectations for 2021 reflect a 35% increase YOY, from $315 million to $428 million according to Yahoo Finance data. The long term revenue expectations are bullish. By 2024, PLUG is expected to post $1.3 Billion in annual revenue according to Morgan Stanley.The Q2 results also affirmed the revenue guidance for 2024, increasing their expected operating income to $200 million and an adjusted $250 million EBITDA. In addition, the EPS predictions for 2021 are conservative, with an expected improvement of 17% YOY however this is subject to change upon further guidance.
Plug Power were also moving 30% of the retail food and groceries in the United States as they are assisting retail giants such as Walmart, Amazon, Kroger, SuperValu, Wegmans, and Aryzta.
The scale of PLUG is impressive, especially if you dive deeper into its vertical integration strategy. Plug Power has been able to concrete its roots deep into the Hydrogen industry, through acquiring their main hydrogen suppliers.
“With the acquisitions of United Hydrogen and Giner ELX, Plug Power is now positioned to be a global leader in generation, liquefaction and distribution of green hydrogen fuel”
Summarising Plug Power outlook
In conclusion, there is no doubt Plug Power has expansive long term potential based upon the industry forecasts and company analysis (opinion not advice). However the sustainability of the short term momentum remains up for debate. Long term investors will key in on the industry growth and any guidance changes as they approach 2024. Short term investors will be more focused upon the Q3 earnings and up-coming company announcements. We will continue to follow Plug Power as they lead the charge into an exciting new era of zero carbon power.
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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Tyger Fitzpatrick, Founder of YIG.